Apple caused huge losses to Facebook

Online advertising agency Lotamine’s analysis shows that the privacy rules for Apple’s new iPhones have dropped nearly $ 10 billion in revenue for Facebook, Snapshot, Twitter and YouTube. Recovery From Financial Times. Newer systems make it more difficult to keep track of users when using apps, resulting in the inability of businesses to display highly profitable custom ads in general.

Apple introduced a new feature called App Tracking Transparency (ATT) last April It receives a lot of criticism and opposition, especially from Facebook, Based on the bulk of its revenue from online advertising. ATT provides users with the ability to choose between different applications to receive customized or generic ads, with the possibility of being tracked. In recent months most users have chosen not to be tracked, thus making companies less likely to access them based on their interests and what they see online.

The Financial Times Following ADT, many advertisers have decided to reduce their investment in advertising on the iOS (operating system of iPhones and iPods) applications on Facebook, Snapshot and other social networks. Part of the investment was transferred to Android, where the privacy rules are different and redirected to systems that display ads directly managed by Apple, which provides some more guarantees in terms of confidentiality, while allowing you to better target advertising campaigns. Users.

Lotame surveyed the performance of quarterly data from Facebook, Snapshot, Twitter and YouTube, saying four social networks will face a 12 percent drop in their revenue by the end of this year, with a minimum revenue of $ 9.85 billion.

Snapshot loses proportionately more than other sites because its structure focuses more on smartphones without multiple revenue sources. Absolutely, the most interesting social network is still Facebook (which also includes Instagram) because it has a large user base.

To illustrate the effects of ATT, Lotame CEO gave an example Financial Times At a hypothetical clothing company, he once got a male customer for $ 5 and invested to show an online marketing campaign for a thousand people: “Well, now to reach a thousand men you have to show the same ad to two thousand people because all of a sudden you can no longer know who is male and who is female. You still get the same $ 5 for those two thousand views, so your costs of repairing a customer have doubled, and you have a 50 percent loss of revenue.

As the cost of advertising on the social network has increased significantly in recent years, the reduction in advertising investment on Facebook has become more pronounced: with the expectation of lower yields, many advertisers immediately cut their investments and redirected them to other economic platforms. Manage advertising. Of these, the social networking site TikTok has seen good growth in advertising at a lower cost.

According to some analysts, Lotame’s ratings may still be particularly inaccurate for Facebook, which runs the risk of having trouble selling ads even in the early months of 2022. Social Networking is developing new settings to provide some more details for iPhone users. Use of technologies other than surveillance technologies that can be excluded by ATT. However, as long as growth takes time and there are new options, Facebook will continue to have low revenue compared to the growth of recent years.

During the October presentation of this year’s third quarter financial results, Snapchat was there Reported Apple lost $ 30 million in revenue targets due to privacy changes. The company also points out that it expects the new system to have a further impact on its advertising revenue in the last quarter of this year.

Twitter appears to be less affected by ATT, as its platform sales sales increased by 41 percent in the last quarter compared to the same period last year. The company believes that it will be less exposed to the changes imposed by Apple as it shows ads based on content and not based on the browsing habits of its subscribers. The Holding Alphabet, which controls Google and YouTube, has also found limited effects in the new rules on iOS.

For Apple, the new ATT is an opportunity to increase its revenue in a field such as online advertising, which has not yet been the focus of its business.

– read more: Apple and Facebook have been offering them for a long time